ALIA copyright service: the digital agenda

Additional comments on the ALCC's response to the Copyright Amendment (Digital Agenda) Bill 1999 Exposure Draft

The following information is provided as a supplement to the Response from the Australian Libraries Copyright Committee (ALCC) on the Exposure Draft Copyright Amendment (Digital Agenda) Bill and Commentary.

Introduction
The ALCC is aware that concerns have been raised by copyright owners as to the operation of the proposals contained in the Digital Agenda draft Bill relating to the library copying provisions. The ALCC understands that these concerns primarily relate to the document supply provisions (ss. 49 and 50) and the proposed application of those provisions to the digital environment.

The ALCC note that one element of the Government's decided policy on the Digital Agenda reforms was outlined in a media release from the Minister for Communications, the Information Economy and the Arts: ('Cultural sector boosted by progressive copyright reform') on 5 May 1998:

Current provisions, which allow cultural organisations to photocopy works within their collections, will be extended to allow them to make digital copies or to use new means of delivery such as e-mail.

We understand, therefore that were the draft bill to be altered to accede to copyright owner demands on ss. 49, 50, 51, 51AA or 51A, Cabinet would have to reverse this policy decision.

We would hope that any such reversal of policy would be based on sound and substantiated argument as to the negative impact that the Digital Agenda proposals, if implemented, would have on Australian society.

Summary of ALCC Position
The ALCC positions can be summarised as follows:

• The Digital Agenda Bill does no more than maintain a balance which has always been reflected in Australian copyright legislation, a balance which has proven not to unreasonably prejudice the legitimate interests of copyright owners;
• The Digital Agenda Bill does not extend the scope of the fair dealing or library copying exceptions, and in fact limits their operation significantly in certain respects (in relation to 'self-service' copying of electronic material in libraries for example);
• The range of activities that libraries and archives are able to undertake will not be expanded by the Digital Agenda Bill. The Bill will simply allow libraries to utilise new technologies in conducting the same activities they have been able to conduct to date, and for the same user groups that they have served to date;
• Whilst the Digital Agenda Bill has been strongly criticised by copyright owners, these criticisms are largely based on the fact that the Digital Agenda Bill does not rewrite the current balance in order to effect the wholesale giveaway of rights of access to copyright material that is being sought by certain interests;
• Whilst the balanced approach in the Digital Agenda Bill will not bring about the instant death of the creative industries as has been claimed, acceding to the demands of copyright owner interests, and cutting back fair dealing, library copying and other exceptions, would have immediate and severe consequences for Australia including:
  • substantial increases in the cost of education, research and the operation of Government (largely at the expense of Government or more accurately, the taxpayer), or a decline in quality of the above;
  • restrictions on competition and the resultant stifling effects on innovation and development affecting Australia's ability to compete in world markets;
  • substantial foreign debt and trade deficit implications as approximately 6 of every 7 dollars collected in royalty or license fees flows out of the country, and 3 of 4 dollars for purchased copyright material goes to copyright owners overseas (from ABS Statistics in Guildberg's Copyright an Economic Perspective ACC, Sydney 1994); and
  • the risk that copyright may become irrelevant in the digital environment due to widespread infringement by a public that does not perceive copyright law to be fair or reasonable.
  • The Current Balance - library copying does not have extremely prejudicial economic effects on copyright owners

As part of a long running campaign to abolish the free library copying provisions, in its submission on the Copyright Amendment (Digital Agenda) Bill 1999, Copyright Agency Limited (CAL) claim that the Government has failed to recognise the "extremely prejudicial effects on rightsholders of the current level use of the fair dealing and library copying provisions" (CAL submission, para 15).

Cal attempt to substantiate this statement by providing token figures on copying levels. However, CAL no evidence of any prejudicial economic effect of this copying on copyright owners is provided. This is because it would be near impossible for CAL to show that the current library provisions have acted as a disincentive to create, or had extremely prejudicial effects.

The publishing industry, and in particular the scientific, medical, and technical publishing sector (owners of the rights to most material requested under document supply provisions) continues to thrive. Reed Elsevier, one of the largest publishing conglomerates in the world, continues to post profits of over ?800 million each year (see financial statements at http://www.reed-elsevier.com/index.cfm?articleid=409), and it is widely acknowledged that the educational and research market is most profitable publishing market sector due to the guaranteed 'captive market'. As stated by Nigel Stapleton, Chairman of Reed International on 15 April, 1999 at an Annual General Meeting:

We [Reed Elsevier] are highly focused on the attractive scientific, professional and business markets, where we have the strongest portfolio of any publisher. Our margins were more than 25 % - well ahead of our industry peer group - and we achieved an operating profit of more than ?800 million. The quality of these earnings is demonstrated by the fact that we converted 99% of this profit into cash. By any measure, this is a successful business and one which has created substantial value for shareholders since the merger in 1993. Ladies and gentlemen, Reed Elsevier has never been in better shape

The 'attractiveness' of scientific, professional and business markets to publishers does not evidence the 'great commercial significance to copyright owners as a major disincentive to create and produce' that CAL claim stems from existing library copying provisions (CAL Submission, para 17).

In the ALCC Response to the Digital Agenda Bill, the extent of the limitations and restrictions on library copying already set out in the Copyright Act was outlined. The ALCC reiterates those comments in relation to the reasons why library copying does not unreasonably prejudice the legitimate interests of copyright owners, and will not do so in the digital environment.

The Digital Agenda Bill does not extend the scope of the exceptions
The ALCC maintains that the Digital Agenda Bill does not expand the rights of users of copyright material. It will simply allow libraries to utilise new technologies in carrying out the same activities that they have always carried out.

The range of activities that libraries are able to conduct under copyright law will not be broadened. In fact, in some cases, currently permissible activities will be restricted in the digital environment for example in relation to:

• relying on the 'reasonable portion' deeming provisions; making material held in library collections available to the public; allowing self service fair dealing copying of digital material; and providing access to materials copied under preservation provisions

The ALCC would like to point out in particular, that as a result of the Digital Agenda Bill, no self-service copying of electronic material acquired by a library will be permitted.

Whereas in the print environment a user is able to take a journal from the library shelves and make any copies required, with an electronic version of the same journal, a copy could only be obtained by requesting the library to make the copy under the limited library copying provisions. Therefore, copies could only be obtained for research or study purposes and not for any other fair dealing purpose such as criticism or review. Furthermore, copying would have to be done in accordance with the strict procedure set out in the Act for library copying.

No 'self service' copying of electronic material accessed in a library would be permissible under the Bill. No copying at all will be permitted for fair dealing purposes other than research or study.

The Digital Agenda Bill will not Bring about an increase in copying levels in libraries
There is simply no evidence to suggest that library copying will increase as a result of any changes implemented by the Digital Agenda Bill. This is due to the practical operation of the amendments, the particular nature of the copyright material under consideration, and the limited user group for this material.

As noted above, no self service copying of material acquired by a library in electronic form will be permitted under the Bill. As such, all copying for research or study will have to be requested through the library copying provisions. This amendment will effectively mean that all research and study copying will be monitored for copyright compliance through the procedural requirements of ss. 49 and 50, and the criminal sanctions attached to those provisions. The ALCC would strongly argue that in combination, these factors will bring about a significant reduction in the amount of copying done by library users, and by libraries.

It is important to note that the vast majority of material copied in and by libraries is of a particular nature. The materials under discussion are not works of popular fiction, daily newspapers or fashion magazines, but invariably highly specific and technical journal materials. This is not the type of material that a student would want to email to fifty of his or her best friends.

Furthermore, the user group served by library copying provisions consists largely of postgraduate students, general researchers, academics, and in particular the scientific and medical research communities. Demand for material from Australian library collections from this user group is not likely to increase voluminously just because material can be emailed rather than faxed or posted. In fact there is already evidence that demand may fall as new and efficient commercial services that are not subject to the limitations and restrictions on library copying become more readily available.

Criticism of the Bill from copyright owner interests
Copyright owners have claimed that new markets for the exploitation of digital copyright material will be crippled by the provisions contained in the draft Bill. It is claimed that irrespective of whether the use is private or not, no amount of information is too small to sell, and copyright owners should be entitled to these 'new' markets.

The ALCC notes the reference to the protection of the legitimate interests of copyright owners in the international treaties. Despite claims from copyright owner interests such as CAL that any impingement on a potential market, no matter how private the use, or how small the amount of the work used, is unreasonably prejudicing a legitimate interest, this approach is not accurate historically under Australian law, and neither is it good policy.

Copyright owners claim that in the digital environment, reading on screen will become a primary market for the exploitation of copyright material. They claim that people will be willing and able to pay for paragraphs of articles or 'books' and that if this kind of access or copying is allowed for free, those 'primary' markets will be destroyed.

What the Government must do in responding to these claims is to determine two things. Firstly, which of these markets are legitimate and should be protected by copyright. Secondly, whether the proposals contained in the Digital Agenda Bill will unreasonably prejudice the legitimate interests that the Government has identified in answering the first question. In answering both of these questions, the determining factor must be whether or not the objectives of copyright law are met. Both must also be considered in light of real evidence, and not unsubstantiated guesses as to how the digital information market is to operate.

An analysis as described above has recently been conducted by the Copyright Law Review Committee in Part 1 of the Committee's report on Simplification of the Copyright Act. At paragraphs 6.16 to 6.27 inclusive, the CLRC examine the very arguments put by CAL and other copyright owner interests in relation to new markets. Because the arguments put by Cal and others in their responses to the Digital Agenda Bill are simply a more finely tuned version of those put to the CLRC Simplification reference, the CLRC analysis is wholly pertinent.

In part 1 of the Report, whilst the CLRC recognises the legitimate interests of the copyright owner, it repeatedly rejects CAL's now familiar claims that the free copying exceptions are no longer valid or fair in the digital environment. The CLRC then specifically endorses the statement that copyright owners have never been entitled to an unlimited scope of rent for their creations (para 6.27, Part 1 CLRC Simplification Report).

The National Interest
The ALCC would also ask that the Government remain mindful of the national interest when considering revisions to the draft bill.

Copyright owner interests have made reference to the fact that the draft bill is 'at odds' with the European Union draft Directive on Certain Aspects of Copyright and Related Rights (CAL submission, para 6).

The ALCC notes that this draft directive has been subject to widespread criticism from European libraries, consumer groups, educational interests, manufacturers of electronic goods, interoperable software producers, and a number of others.

Australia must take care to differentiate its interests in copyright from that of other nations. The different position that Australia is in as a gross net importer of copyright material and a geographically isolated country with a widely dispersed population must be taken into account in determining what level of copyright protection is in our national interest.

Put simply, increasing the scope of copyright protection and restricting user rights to access information would directly result in an increase in the amount of money flowing out of the country.

Furthermore, any restrictions on copying and supply by libraries is likely to directly disadvantage those Australians not located within close proximity of a major library.

It must also be noted that Australian copyright law is and always has been based on a utilitarian approach rather than the natural rights approach applied in most continental European jurisdictions.

ALCC response on criticism of Digital Agenda library copying proposals

The ACC and CAL oppose the provisions allowing libraries to utilise new technology in relying on the library and archives copying provisions for a number of reasons. The ALCC response to those arguments is outlined below.

Sections 49 and 50
In real terms, changes to ss. 49 and 50 under the Digital Agenda Bill will mean that libraries will be able to scan and email material to users or other libraries rather than photocopy and fax or post it.

Nevertheless, CAL and the ACC claim that this 'seemingly minor change' will 'radically alter the balance between the interests of owners and users' (CAL submission, para 110). The ALCC fails to see how this is the case.

Allowing a library to digitise a work could enable a library to add to their collection by building up a database of works scanned in response to requests under ss. 49 and 50 (ACC submission pg.6)

The ACC base their claim that "the balance that now exists will not be preserved by the translation of the library exceptions into the digital arena" (pg. 5, ACC Submission) partly on the fact that photocopying under ss. 49 and 50 does not add to the library's collection, but digitising has the potential to (pg. 6, ACC Submission).

Libraries have always interpreted the wording of ss. 49 and 50 to indicate that only one copy is to end up in existence. Thus, where the copy is supplied by way of facsimile, for example, the library will destroy the copy used to make the fax transmission. It has always been assumed by those advising the library community that it would be against the intent and spirit of the provisions (if not the wording itself) to maintain a database of scanned copies. The Australian Council of Libraries and Information Services (ACLIS) has in the past provided public advice to this effect.

Libraries do not wish to utilise the document supply provisions in this way, and although it is submitted that the provisions are already clear in this respect, the ALCC offers no objections to the issue being clarified for the benefit and comfort of the Australian Copyright Council. The ALCC would support the ACC's suggestion, however, that the provisions be altered to specifically allow a library to maintain a database of scanned copies for purposes of supply under ss. 49 and 50 only (ACC submission, pg.6).

A digital copy is far more valuable to a client than a photocopy (ACC submission, pg. 6)

The ALCC queries whether for purposes of research or study a digital copy will be of significantly more value to a library user than a photocopy.

However, the ALCC would also submit that even if this argument were able to be substantiated, it is irrelevant. The whole point of the Digital Agenda reforms to the library provisions is to allow libraries to utilise new technology to disseminate the same material to the same people for the same purposes as are currently permitted under the Copyright Act. Legitimate storing, searching and editing of material for purposes of research or study is generally not an infringement of copyright, and cannot be controlled by the copyright owner in any event. Again, the ALCC fails to see how this argument could be persuasive in convincing the Government to cut back the Digital Agenda library copying proposals.

The Digital Agenda Bill will allow libraries to set up in competition with on-line publishers for the supply of articles and portions of works (ACC Submission pg6, CAL Submission para 48)

As noted by the CLRC in Part 1 of the Simplification Report (para 7.27), the limited and tightly regulated copying rights that libraries and archives are granted under the Copyright Act do not compare to the exclusive rights granted to publishers as copyright owners or licencees.

The ALCC would refer to earlier discussion above on the legitimate interests of copyright owners and the fact that copyright does not exist to protect a market in words and sentences as CAL and the ACC seem to advocate.

The ALCC strongly maintains that that the copying of limited portions of copyright material for research or study purposes is not a market that copyright owners are entitled to be granted under copyright law as the detriment to the public interest of granting this increase in the scope of protection would not be justifiable, considering the objectives of copyright law.

The profit tests focusing on the intention or otherwise are ineffective. In particular, Government should not require copyright owners to subsidise the cost recovery activities of non-profit entities (CAL Submission, para 36)

It is simply ridiculous and false to characterise document supply services offered by Australian libraries as 'cost recovery activities', which 'significantly reduce library overheads' (as CAL does at para 36 and 111 of their submission).

Despite the cost-recovery charge that libraries are able to collect on supply of material, document supply services in Australia are largely subsidised by the libraries providing the service. It is broadly estimated that cost recovery charges do not recover more than one third of the actual cost of supplying material to users and other libraries when all of the costs of providing a document supply service in a library are accounted for (including the cost of acquiring and maintaining a collection). It is ridiculous to claim that cost recovery charges for document supply under ss. 49 and 50 are bolstering library budgets and providing income to cover the general administration and operation of libraries. Libraries do not offer document supply services in reliance of ss. 49 and 50 in order to receive financial advantage either directly or indirectly.

An article in a periodical publication is a whole work, and will be the unit supplied to the market by copyright owners in the future (CAL Submission, para 120, ACC Submission, pg.2)

The ALCC contends that if these predictions prove correct, then it will be possible for copyright owners to successfully argue that articles which are genuinely being supplied to the market as 'articles' would not come within the definition of 'an article contained in a periodical publication' and thus would not be deemed to be 'fair' in the relevant provisions in the Copyright Act.

Whilst there is no definition in the Act, the Macquarie Dictionary defines a periodical publication as 'a magazine, journal etc., issued at regularly recurring intervals'. The ALCC questions whether CAL, the APA, the ACC or anyone else has actually provided any examples where publishers are genuinely supplying the market with single articles, without the umbrella of a periodical publication as the unit of supply. The ALCC contends that if the article is in fact being supplied as an article contained in a periodical publication, then the market to be protected is in fact that of the periodical publication.

A library could also use a circumvention device to access an article made available by the copyright owner on-line and download and email that article to another library that wants it for their collection. The client library could then reciprocate so that both libraries have a copy (ACC submission, pgs.8 & 15)

The APA, ASA, CAL and the Australian Copyright Council have stated that through a combination of provisions contained in the Digital Agenda Bill, a library will be able to 'hack' into a publisher's database and then supply copies of material contained in that database to every library in the country without having to purchase the material or pay any copyright fee. This is a perfect example of the way that copyright owner interests, notably CAL, the APA and even more unfortunately the Australian Copyright Council, have taken to characterising libraries and librarians as unscrupulous, underhand and engaged in a continuing campaign to exploit every possible means of depriving copyright owners of payment. The ALCC strongly objects to this portrayal and would ask the Government to ignore perceptions such as those displayed here which are both offensive and based on complete ignorance of the actual functioning of the Australian library sector.

The use of the word 'hack', which is usually associated with the act of illegally gaining access to a computer system is deliberate and misleading, as illegal computer hacking is not altered by the Digital Agenda Bill. In this regard, the ALCC strongly maintains that issues surrounding the availability of circumvention devices for non-infringing purposes should not be confused with issues relating to the operation of the library copying provisions under the Digital Agenda reforms. The scope of, and exceptions to the exclusive rights comprising copyright, are issues that must be addressed quite separately from the issue of enforcement of rights.

The ALCC notes that problems with the operation of the temporary copies exception have been raised by a number of interests, but stresses that this is a question of determining the scope of the browsing right, and should not be addressed in the context of the availability of circumvention devices, or the operation of the library copying provisions.

Preservation provisions
The ALCC reiterates comments made by the library and archive community throughout the Digital Agenda consultation process on the importance of the role that libraries and archives undertake in preserving copyright material.

The ALCC would contend that comments made by copyright owner interest groups opposing the application of the preservation provisions in the digital environment highlight a profound lack of understanding of the important role that libraries and archives fulfil in collecting and preserving information and copyright material. The ALCC responds to several of the criticisms of the proposals as follows:

• The ACC oppose the extension of the provisions allowing libraries and archives to reproduce copyright material for purposes preservation and collection management (ACC submission, pg.9)
• The ACC fails provide any justification for this opposition. Again, the ALCC questions whether the ACC has any understanding of the concept and importance of preservation activities.
• Proposed changes to s. 51A(2)(a) will allow libraries to digitise and make their entire collection available to users (CAL submission, para 136).

It is clearly stated in the Exposure Draft Bill that reproductions made under proposed s. 51A(2)(a) could only be made available to 'officers of the library or archives by making it available online to be accessed through the use of a computer terminal installed within the premises of the library or archives' (Item 59, Exposure Draft Bill). The ALCC therefore questions how CAL have reached the conclusion that copies made under this provision could be made available to library users.

The effect of s. 51A(2)(b) is that a library could make available online on its premises any work held in its collection (presumably if it is already in digital form) including those works it had digitised for clients under s. 49 and s. 50 (ACC submission, pg.10).

In response to this, the ALCC firstly queries what exactly the ACC thinks a library or archives should be able to do with material held in its collection if not make it available on the premises. Providing access is precisely what libraries exist to do.

Secondly, the ALCC would point out that, as noted above, proposed s. 51A(2)(b) only allows a library or archives to make material available to 'officers or staff of the library or archives' and not generally available online as the ACC seem to suggest.

Finally, the ALCC would reiterate the ALCC's comments on a library's ability to retain copies of material digitised under ss. 49 and 50 (outlined above at para 41 of this document).

Concluding Statement
The ALCC thanks the Government for considering these supplementary remarks in reviewing the Exposure Draft Copyright Amendment (Digital Agenda) Bill 1999.